Federal Reserve policymakers are likely to stay the course and raise key short-term interest rates three times this year, market analysts said.
Reuters reported that the latest market sell-off in equities, “wiped out $4 trillion in value from record peaks eight days ago, raising concerns such a swift loss of wealth would hurt corporate investments and consumer spending just when many economies in addition to the United States are on a synchronized growth path”.
The Bank of England was expected to hold rates at 0.5% in today’s 1200 GMT print. MPC members voted unanimously in holding increase interest rates in December. Three months ago, the central bank raised its main interest rate for the first time in a decade to get inflation down- holding rates has added to Brexit uncertainties. For the time being, markets expect one or two interest rate hikes in 2018.
The greenback rose to a two-week peak against its major rivals as forex traders fled back to the safety of the dollar as European shares slid. EUR/USD fell to 1.2221 early in European session, down more than 300 points from its three-year peak hit 10 days ago.
Traditional safe havens such as the Japanese yen and Swiss franc have enjoyed relatively modest gains during the recent stock market volatility, and still down against the dollar.